Information technology and economic change: The impact of the printing press

Jeremiah Dittmar11 February 2011

Despite the revolutionary technological advance of the printing press in the 15th century, there is precious little economic evidence of its benefits. Using data on 200 European cities between 1450 and 1600, this column finds that economic growth was higher by as much as 60 percentage points in cities that adopted the technology.

“Printing, lately invented in Mainz, is the art of arts, the science of sciences. Thanks to its rapid diffusion the world is endowed with a treasure house of wisdom and knowledge, till now hidden from view. An infinite number of works which very few students could have consulted in Paris, or Athens or in the libraries of other great university towns, are now translated into all languages and scattered abroad among all the nations of the world”. --Werner Rolewinck (1474)

The movable type printing press was the great revolution in Renaissance information technology and arguably provides the closest historical parallel to the emergence of the internet (see the recent column on this site, van Zanden 2010).

The first printing press was established around 1450 in Mainz, Germany. Contemporaries saw the technology ushering in dramatic changes in the way knowledge was stored and exchanged (Rolewinck 1474). But what was the economic impact of this revolution in information technology? By lowering the cost of disseminating ideas, did the explosion of print media erode the importance of location?

A puzzle

Historians argue that the printing press was among the most revolutionary inventions in human history, responsible for a diffusion of knowledge and ideas, “dwarfing in scale anything which had occurred since the invention of writing” (Roberts 1996, p. 220). Yet economists have struggled to find any evidence of this information technology revolution in measures of aggregate productivity or per capita income (Clark 2001, Mokyr 2005). The historical data thus present us with a puzzle analogous to the famous Solow productivity paradox – that, until the mid-1990s, the data on macroeconomic productivity showed no effect of innovations in computer-based information technology.

New city-level data

In recent work (Dittmar 2010a), I examine the revolution in Renaissance information technology from a new perspective by assembling city-level data on the diffusion of the printing press in 15th-century Europe. The data record each city in which a printing press was established 1450-1500 – some 200 out of over 1,000 historic cities (see also an interview on this site, Dittmar 2010b).

The research emphasises cities for three principal reasons.

First, the printing press was an urban technology, producing for urban consumers.

Second, cities were seedbeds for economic ideas and social groups that drove the emergence of modern growth.

Third, city sizes were historically important indicators of economic prosperity, and broad-based city growth was associated with macroeconomic growth (Bairoch 1988, Acemoglu et al. 2005).

Figure 1 summarises the data and shows how printing diffused from Mainz 1450-1500.

Figure 1. The diffusion of the printing press

The association between printing and city growth

City-level data on the adoption of the printing press can be exploited to examine two key questions:

Was the new technology associated with city growth?

And, if so, how large was the association?

I find that cities in which printing presses were established 1450-1500 had no prior growth advantage, but subsequently grew far faster than similar cities without printing presses. My work uses a difference-in-differences estimation strategy to document the association between printing and city growth. The estimates suggest early adoption of the printing press was associated with a population growth advantage of 21 percentage points 1500-1600, when mean city growth was 30 percentage points. The difference-in-differences model shows that cities that adopted the printing press in the late 1400s had no prior growth advantage, but grew at least 35 percentage points more than similar non-adopting cities from 1500 to 1600.

Diffusion of the new technology

Printing presses were not set down at random across European cities. Cities that adopted the printing press 1450-1500 subsequently enjoyed unusual dynamism. Did printers simply pick locations that were already bound for growth? This question can be addressed by exploiting supply-side constraints that limited the diffusion of the technology over the infant industry period.

The movable type printing press was developed by Johannes Gutenberg and his business partners in Mainz, Germany around 1450. Printing was from the outset a for-profit enterprise. But over the period 1450-1500, technical barriers limited entry on the supply side.

The key innovation in printing – the precise combination of metal alloys and the process used to cast the metal type – were trade secrets. The underlying knowledge remained quasi-proprietary for almost a century. The first known “blueprint” manual on the production of movable type was only printed in 1540. Over the period 1450-1500, the master printers who established presses in cities across Europe were overwhelmingly German. Most had either been apprentices of Gutenberg and his partners in Mainz or had learned from former apprentices. Thus a limited number of printers brought the technology from Mainz to other cities.

The restrictions on diffusion meant that cities relatively close to Mainz were more likely to receive the technology other things equal. Printing presses were established in 205 cities 1450-1500, but not in 40 of Europe’s 100 largest cities. Remarkably, regulatory barriers did not limit diffusion. Printing fell outside existing guild regulations and was not resisted by scribes, princes, or the Church (Neddermeyer 1997, Barbier 2006, Brady 2009).

An instrumental-variable approach

Historians observe that printing diffused from Mainz in “concentric circles” (Barbier 2006). Distance from Mainz was significantly associated with early adoption of the printing press, but neither with city growth before the diffusion of printing nor with other observable determinants of subsequent growth. The geographic pattern of diffusion thus arguably allows us to identify exogenous variation in adoption. Exploiting distance from Mainz as an instrument for adoption, I find large and significant estimates of the relationship between the adoption of the printing press and city growth. I find a 60 percentage point growth advantage between 1500-1600.

The importance of distance from Mainz is supported by an exercise using “placebo” distances. When I employ distance from Venice, Amsterdam, London, or Wittenberg instead of distance from Mainz as the instrument, the estimated print effect is statistically insignificant.

Positive spillovers

Cities that adopted print media benefitted from positive spillovers in human capital accumulation and technological change broadly defined. These spillovers exerted an upward pressure on the returns to labour, made cities culturally dynamic, and attracted migrants.

In the pre-industrial era, commerce was a more important source of urban wealth and income than tradable industrial production. Print media played a key role in the development of skills that were valuable to merchants. Following the invention printing, European presses produced a stream of math textbooks used by students preparing for careers in business. The first known printed mathematics text is the Treviso Arithmetic (1478). It begins:

“I have often been asked by certain youths...who look forward to mercantile pursuits, to put into writing the fundamental principles of arithmetic...Here beginneth a Practica, very helpful to all who have to do with that commercial art.”1

The first Portuguese arithmetic (1519) opens in similar fashion:

“I am printing this arithmetic because it is a thing so necessary in Portugal for transactions with the merchants of India, Persia, Ethiopia, and other places.”2

These and hundreds of similar texts worked students through problem sets concerned with calculating exchange rates, profit shares, and interest rates.

Broadly, print media was also associated with the diffusion of cutting-edge business practice (such as book-keeping), literacy, and the social ascent of new professionals – merchants, lawyers, officials, doctors, and teachers.

Local effects in a world with trade

Cities with printing presses enjoyed special advantages. Two key factors explain the localisation of positive spillovers.

First, positive spillovers were localised by high transport costs historically associated with inter-city trade. Print media was especially costly to transport because it was heavy and sensitive to damp. This limited the diffusion of print media. According to Flood (1987, p.25), “Outside the towns where books were printed or which were main centres of the burgeoning book trade the public were dependent on what itinerant traders offered them and on word of mouth.” As a result, shadow prices were often exceedingly high in cities without printing presses. Moreover, transport costs fostered co-agglomeration. The printing press attracted paper mills, illuminators, translators, students, and schools.

The second factor behind the localisation of spillovers is intriguing given contemporary questions about the impact of information technology. The printing press made it cheaper to transmit ideas over distance, but it also fostered important face-to-face interactions. The printer’s workshop brought scholars, merchants, craftsmen, and mechanics together for the first time in a commercial environment, eroding a pre-existing “town and gown” divide. The technology produced not just books, but also in the printer-scholar, “a ‘new man’...adept in handling machines and marketing products even while editing texts, founding learned societies, promoting artists and authors, [and] advancing new forms of data collection” (Eisenstein 1979, 250-251). These effects transformed intellectual and business landscapes at the local level.

Information technology, cities, and capitalism

The printing press was one of the greatest revolutions in information technology. The impact of the printing press is hard to identify in aggregate data. However, the diffusion of the technology was associated with extraordinary subsequent economic dynamism at the city level. European cities were seedbeds of ideas and business practices that drove the transition to modern growth. These facts suggest that the printing press had very far-reaching consequences through its impact on the development of cities.